Price Turbulence; The Textile Industry Is Back In Trouble

Clothing, food, housing and transportation rank first, and the clothing industry naturally bears the brunt of the price rise. The feeling of citizens when shopping recently is that the price of clothes has more than doubled than in previous years. The shrewd teacher's milk ran to the wholesale city and couldn't buy the children's down jacket at a price that was reasonable.

● Cloth shop boss: cotton used to be more than 10000 yuan per ton, but now it is more than 30000 yuan.

● Clothing factory boss: The original cost of a garment was 50 yuan, but now it costs at least 60 yuan.

● Wholesalers: Since November, the wholesale price of each piece of clothing has been forced up by 3-4 yuan.

● Expert: If the RMB appreciates by 5%, it is estimated that more than half of the enterprises will face bankruptcy.

Anti inflation Declaration

Clothing, food, housing and transportation rank first, and the clothing industry naturally bears the brunt of the price rise. The feeling of citizens when shopping recently is that, Clothing price This is more than double that of previous years. The shrewd teacher's milk ran to the wholesale city and couldn't buy the children's down jacket at a price that was reasonable.

In this round of rising prices, the textile industry, which has just recovered from the financial crisis, is back in trouble. The price of cotton and cotton yarn is singing all the way, "cotton rose 20% in 4 days", "cotton yarn rose 20000 yuan per ton in 20 days"; Cloth factories and garment factories dare not produce raw materials without authorization... The impact of rising prices is gradually transmitted from upstream to downstream. In the state of restlessness of the whole market, the government departments stepped forward and tried to inject "tranquilizer" into the market. But how effective is the government regulation, business Frankly, it is not optimistic, "as long as someone hoards goods, regulation will not play a major role, and ultimately it depends on the market."

For consumers at the end of this chain, they can't skip meals and buy less clothes. In order to save money, it is wise to seek for bargains. Buying less is the way to save money. As the old saying goes, "The new three years and the old three years have been sewn and mended for another three years", we should often use it to talk about it several times.

The West Square of Guangzhou Railway Station is still crowded at night.

The black plastic bag and large woven bag are bulging. They are pulled by hand and cart from all over the world Clothing wholesaler This is the way to get the clothes you need from here. If an unintelligent car drives in, it can only be held for a long time by the stream of people.

Mr. Zheng, who opened a jeans processing factory in Xintang, Zengcheng, visited his store in Zhanxi Square a few days ago and was quite anxious. He was worried that even the current situation might not exist next year.

Cotton yarn increased by 20000 yuan in 20 days

"The price of cotton has risen by 20% in four days, which will soon be transmitted to the downstream, and the pressure on textile enterprises will be great." On September 20, this year, Wang Wei, Deputy Director of the Consumer Products Industry Department of the Ministry of Industry and Information Technology, told the media that the textile industry has been back in trouble. The facts are really not optimistic.

Haizhu District Zhongda Cloth Market, the leader in the domestic cloth market, has been plagued by residents and the media for years because of the chaotic traffic jam. Over the years, the traffic police department's high-pressure rectification has only made a slight improvement, but with the rising tide of prices sweeping, its traffic conditions will be "cured". Last two weeks, when reporters came here, the originally continuous flow of people had disappeared, and few people were interested in the pavement cloth pile at the gate.

"In 20 days, it has increased by 20000 yuan!" In a mid-range cloth shop in Jiuzhou New Street, Zhongda Cloth Market, Mr. Chen, the boss, frowned and told the reporter, sighing, "Few people buy it, and the business is dead".

In the past, Mr. Chen bought 32g of high-quality cotton yarn at a price of about 30000 yuan/ton. However, the price of cotton is rising all the way, which directly drives the price of cotton yarn. Since the beginning of November, the price of cotton yarn has risen all the way. By the middle of the month, the price of this type of cotton yarn had risen to 50000 yuan/ton! Until November 25, there was a slight decline, but recently it still hovered around 40000 yuan/ton.

"The market does not fluctuate like this at ordinary times when doing business for so many years". Mr. Chen said that the original autumn had passed, and many factories had to clear the goods around December, "normally this time is the cheapest". He sighed "Unexpectedly".

In order to solve the problem of cotton yarn price rise, Mr. Chen went to cotton yarn mills in Henan and Shandong to buy yarn and cloth. However, the voice of cotton yarn across the country also rose, "We can't sell it even if we buy it at a high price".

When the price rose to 50000 yuan/ton, Mr. Chen dared not sell, but when it fell back to 40000 yuan at the end of November, he quickly bought 40 or 50 tons of goods.

But no one came to order, and Mr. Chen dared not produce without authorization. There were more than 200 workers in the factory, but now 40 or 50 people have left. Some of them quit their jobs, and some of them have taken a holiday. The production scale has also been adjusted to 1/3 of the original.

Early production of spring clothing is a blessing in disguise {page_break}

When some people mourn the uncertain future, others are glad that they have "benefited from misfortune".

As the winter of this year came very late, Wan Jie, the general manager of Guangzhou Wanzi Garment Co., Ltd., started to produce spring clothes in advance after producing a batch of winter clothes.

At the beginning of October, he selected a cloth of 55 yuan/kg from Mr. Chen's shop in Zhongda Cloth Market and ordered more than 20 tons at one time. This batch of cloth is enough for him to produce hundreds of thousands of spring clothes.

I can't order so many goods as long as I'm a week late. After the event, Wan Jie congratulated himself on his quick action, which was "a blessing in disguise". A week after he ordered, the fabric with the same fabric rose to 65 yuan/kg. When the goods were received on October 20, the price of the same cloth was more than 65 yuan/kg.

"Raw materials such as cotton have increased, auxiliary materials have also increased, workers' wages have also increased, prices have also increased, and the cost of making a garment has naturally increased". Wan Jie said that, considering raw materials, it used to cost 50 yuan to make a dress, but now it costs at least 60 yuan, and the price of a processed shirt has risen from 200 to 300 yuan to 300 to 400 yuan.

Some factories work half a month and play half a month

But not all garment factories are as lucky as Wanjie. "In the past, they were so busy that they asked me to process for them. Now, they are out of stock and ask me if they have any goods to do.". Wan Jie didn't know how many peers were trapped by the price rise, but he only knew that individual peers around him began to talk to him about their worries. Mr. Yu, a fellow villager, is one of them.

In April this year, Mr. Yu invested and operated a garment factory covering an area of more than 600 square meters near Dashiqiao in Panyu. However, since the price rise in November, Mr. Yu has not been able to take orders, "about half a month for playing". Although he had nothing to do, Mr. Yu said he did not dare to fire people. He was afraid that when the market recovered next year, he would not be able to recruit people, so he still paid a basic salary of more than 1000 yuan per worker every month.

"In November alone, we lost 100000 yuan, and it is estimated that this will be the same in December!" Mr. Yu said that he was still waiting for the market judgment, and he wanted to stick to it.

"The financial crisis is not as difficult as this year"

The same tragedy has spread to clothing wholesalers.

Mr. Zheng opened a garment factory in Xintang, Zengcheng 20 years ago, both for export and domestic sales. He has opened many stores in charge of wholesale clothing in the city, one of which is in Zhanxi Square near the railway station.

"The financial crisis was not so difficult in those years.". Mr. Zheng said that the price increase since this year has led to the increase of auxiliary materials and workers' wages in addition to raw materials. In addition to the unstable market price, many customers have become conservative, with fewer export orders and less domestic sales. The wholesale price has also been kept very low, so that the profit of the factory can only maintain its daily operation.

"Previously, the profit was at least 10%, and it has not exceeded 5% since November". Mr. Zheng said that 5% of the profits can only make the factory break even.

"Since November, the business has halved!" According to Lan Jie, who is responsible for clothing wholesale in Jinbao (Foreign Trade) Clothing City, Zhanxi Square, the wholesale price of each piece of clothing has been forced to rise by 3 to 4 yuan due to the rise in the price of raw materials.

On the afternoon of December 13, two women rushed to Lanjie's store from Shanghai to purchase a batch of clothes. Compared with the past, this time, smaller plastic bags were used for clothes, with only 10 pieces per small bag. After shopping, the two women went to other stores. They said that they were afraid that they would not be able to sell out if they bought more goods, so they had to buy a variety of styles with less quantity.

"Now consumers will also buy clothes rationally, so wholesale is also relatively cautious". Lan Jie said that retailers are more picky in choosing clothes, and the number is relatively reduced; With the appreciation of RMB, the US dollar is falling. "I don't know what to do if this continues!"

-Expert comments

Nearly 20% of garment enterprises have reached the critical point of profit and loss

Liu Yueping, president of Guangdong Garment Industry Association, said that the whole industry was facing a reshuffle

According to Liu Yueping, president of Guangdong Garment Industry Association, cotton prices have gradually risen since October last year. Since the second half of this year alone, the fabric price has risen by more than 60% month on month compared with the first half of this year, which makes the business pressure of enterprises increase sharply. For example, for a children's clothing enterprise in Dongguan, the fabric cost accounted for 30% of the company's clothing production cost. In the second half of the year, although the turnover increased by 30% year on year, the profit declined by 20%. Most enterprises choose to absorb the pressure of price increase in various ways. For example, some enterprises choose wool and nylon instead of pure cotton for winter clothing; Designers will give more consideration to simple style cutting when designing clothes; Some enterprises have taken measures to strengthen production cost control, adjust personnel and organizational structure, and control the rise of human cost; Some enterprises have transferred their factories to Jiangxi, Anhui and other inland provinces; There are also enterprises with meager profits that can't bear the burden and think that it is better to suspend work rather than start to lose money.

Although the global economy has warmed up this year and foreign orders have gradually increased, the profit of clothing export orders is generally low. Some enterprises have to protect their profits or even accept orders at a loss in order to retain customers, and dare not take large orders. After the appreciation of RMB, some export products may be sold in the domestic market, which will also intensify the competition in the domestic market. Therefore, the clothing industry has become one of the industries expected to be negatively affected by the appreciation.

Liu Yueping said, "According to expert estimates, the general product profit of Guangdong garment enterprises is about 3%. Domestic enterprises have low bargaining power. If the RMB appreciates by 1% now, nearly 20% of enterprises have reached the critical point of profit and loss, and the RMB appreciates by 5%, it is estimated that more than half of enterprises will face bankruptcy." The appreciation of RMB will also promote the effect of passive adjustment in the clothing industry. The appreciation will form a reverse force mechanism for enterprises. If enterprises do not carry out industrial upgrading and structural adjustment, they may be eliminated, which is more conducive to advantageous companies to expand market share, and the industry will be reshuffled. {page_break}

-The government punches

At the end of September this year

The relevant departments decided to continue to put 400000 tons of national reserve cotton on the market through auction on the basis of 600000 tons of national reserve cotton in the early stage. As of October 20, 1012336 tons of reserve cotton had been put on the market.

November 10

The central bank announced liquidity tightening measures again.

November 16

RMB deposit reserve ratio of deposit financial institutions is 0.5%. (Southern Metropolis Daily www.nddaily.com Southern MetropolisDailyMark)

November 17

The executive meeting of the State Council said that temporary price intervention measures should be implemented for important necessities and means of production when necessary.

November 19

The central bank decided to raise the RMB deposit reserve ratio of deposit financial institutions by 0.5 percentage points from November 29.

November 20

The State Council's "National Sixteen Rules" on price regulation launched a combination of measures, such as increasing subsidies for low-income people, price control and strengthening supervision to prevent hoarding and speculation.

November 22-26

The Ministry of Commerce, the Ministry of Agriculture and other ministries and commissions jointly responded to the war by sending 9 notices to regulate prices within 5 days.

(Note: The above information is from websites such as China Cotton Information Network)

-Businessmen watch boxing

"I hope it can be lowered to a lower level, and then lowered..."

Mr. Chen, the boss of the cloth shop of the Zhongda Cloth Market in Haizhu District, was once grateful that when the raw materials rose most sharply, the relevant departments stepped forward to give a shot of "tranquilizer" to the restless market.

"I hope it can be reduced to a low point, and then to a low point..." Mr. Chen said that he had never seen such a sharp rise in raw materials in the garment industry for more than ten years. Although the relevant departments cracked down, he still felt "on the high side". "Cotton was only 10000 yuan and a ton before, but now it is 30000 yuan".

"The market is not good now, so we can order it when there is a market". Since the relevant departments issued regulatory policies, Mr. Chen has not yet purchased cotton yarn, and he expects the market to recover next year.

"The more hit, the more speculation, the more out of control......"

Like Mr. Chen, Mr. Zheng of Xintang Garment Factory also expects the market to recover, but he is not optimistic about policy regulation, "Ultimately, it depends on the market". {page_break}

At the beginning of this year, a friend of Mr. Zheng who was doing business in Dongguan bought all the cotton he needed for the whole year. "He has money. No matter how the price rises, he is not in a hurry. Anyway, he has goods to stock up". Mr. Zheng believed that although the government had released reserve cotton when prices were high, many monks and less porridge were soon robbed. Although the state later introduced policies to reduce the price, the futures also fell, but some rich cotton mills bought a lot of cotton before, and would not release the goods anyway.

"It's hard for me to control the price now", Mr. Zheng said that in this way, enterprises can only play freely, the fittest survive, and they will be eliminated if they are unable to do so.